Henry Gondorff, the good-guy con artist played to perfection by Paul Newman in the 1973 blockbuster hit, The Sting, scooped up his remaining chips and pushed them to the center of the table. Pitted against Robert Shaw’s ruthless Depression-era crime boss figure Doyle Lonnegan in a game of high stakes poker, it was apparent that whoever lost was going to lose big.
Gondorff had insulted Lonnegan’s country-club sensibilities for most of the night; from the ever-present gin bottle to his slovenly and rumpled appearance, Gondorff was an irritant worse than poison ivy on a hot summer’s day. Worst of all he was winning, and Lonnegan wasn’t about to let that stand; he’d sooner kill him than lose to him. Hours passed, tempers rose, and inevitably, words were exchanged. A break to cool off was in order.
While out of the room, a steamed-up Lonnegan ordered his hatchet man to secretly switch decks from a legitimate one to a stacked one, and deal Gondorff a “can’t miss” hand of four 3’s. Only Lonnegan’s hand would be even better; four 9’s. He’d make sure he beat him in the end – nobody showed up Doyle Lonnegan.
Play resumed and the cards were dealt. Quickly, all but Gondorff and Lonnegan were cut from the game with bad hands, leaving the con artist and the crime boss to face each other; mano-a-mano. Each bet heavily, confident in what he had, and the last move was Newman’s call.
“Four nine’s” said Lonnegan smugly as he unfolded his hand, laying the cards out for all to see. He relaxed and waited, a hint of a smile stealing across his face. He knew Gondorff was beaten – all he had to do was wait for him to fold and admit defeat. Everyone looked anxiously at Newman, and the camera panned to his losing hand with the four 3’s in it, held close to his vest to protect it from prying eyes. Once more he looked at the cards; once more he looked at the pile of chips. Finally, after what seemed an eternity, he leaned forward and spread his hand for all to see, looking straight at Lonnegan as he spoke in a clear, crisp voice:
“Four jacks! You owe me fifteen grand, pal,” said Gondorff, with a finality that left no doubt as to who had out-cheated whom.
Jacob Little wasn’t in the movies, but he was destined to experience the same kind of dramatic encounter with his adversaries as Gondorff had; only Little’s was nearly a century earlier.
Born in Newburyport, Massachusetts, he arrived in New York in 1817 and went to work for Jacob Barker, a prominent and successful local merchant. Standing out among his peers as a diligent and tireless worker, after a few short years Little felt confident enough to handle his own affairs, and so in 1822 he opened an office in the financial district with an eye to making his fortune. A self-styled expert in financial matters, he earned a well-deserved reputation for success on the Street and, aided by an uncanny ability to make the right decision at nearly always the right time, he grew rich in the process.
Famous for his bold, speculative moves, he invited an odd mixture of both admiration and jealousy among his peers, yet like all successful men he was not short of enemies eager to see him fall. In 1855, a select few of them thought they saw their chance.
In those early days on Wall Street options contracts could be sold with a maturity of from six to twelve months from the date of sale. Figuring that the high price of railroad stocks were due for a correction, Little saw an opportunity to profit handsomely by shorting Erie stock, so he began selling options contracts on it by the bundle. If, as had happened so many times before, he was right and Erie was indeed headed south, he only need buy when the price dropped enough to fulfill his contracts and make a huge profit. But there would have to be stock available to purchase when the time came to deliver, and that’s precisely where his adversaries saw their chance to upend him.
A few members of the Erie board had gotten together in secret and formed a syndicate of sorts. Acting in concert, they set about to buy as much Erie stock and as many of Little’s options contracts as they could lay their hands on in an attempt to run up the price and corner the market. Armed with abundant capital at their backs, it wasn’t long before they succeeded, and by the appointed date set for Little to make good on his contracts they had locked up fairly all of the available Erie stock under their control. To make matters worse, the Board had successfully bid up the price of Erie to a full 15 points above the price where Little had sold it. Disaster and ruin lay dead ahead for the great financier, and there appeared to be no way of avoiding it.
As was their right, sometime after six months had passed the Syndicate gave the required one day’s notice for delivery of the stock certificates. Little, seemingly oblivious to what was going on, calmly went about his normal routine, selling ever more options on Erie to the delight of the board members waiting to pounce.
On the appointed day the Erie office, located in lower Manhatten, was filled to overflowing with anxious brokers awaiting a showdown. There was excitement in the air, as traders and passers-by shared equally in the uneasiness of the moment. Everyone waited to see if Little would lose the day with only his “four three’s”, or if by some miracle he was able to trump the Syndicate and pull “jacks” from his hand at the last moment.
Full of confidence, the Syndicate men waited for him to appear. Finally, near to closing time he strolled in and sat down in a comfortable chair, not sensing the executioner’s axe at the ready. The board members immediately confronted him and demanded their stock, stock which they knew full well he could not deliver; or so they thought. Little eyed them for a moment, and then quickly got up and walked briskly over to Mr. Otis in the Erie transfer room across the way, where stock ownership was transferred, demanding to see the record book. Seizing it, he began writing out shares of Erie stock and doling them out to those clamoring for payment; 500 shares here, 1,000 shares there, until all comers had been satisfied. The corner had been broken! Dumbfounded, the Syndicate demanded to know how it was that he was able to deliver Erie shares when there wasn’t a shred of it available anywhere.
Little smiled with satisfaction. Patiently, he revealed that while on a trip to London a short time before he had come across an opportunity to buy a sizeable block of Erie convertible bonds, bonds which were convertible to stock upon demand within one year of purchase. Immediately recognizing their value, he quietly salted them away for future use. An hour before his meeting with the Board members, he had simply walked into the Erie office, presented the bonds, and demanded their equivalent value in stock. The Company had no choice but to comply, and Little, flush with victory, cemented his reputation as the Great Bear of Wall Street.
While out of the room, a steamed-up Lonnegan ordered his hatchet man to secretly switch decks from a legitimate one to a stacked one, and deal Gondorff a “can’t miss” hand of four 3’s. Only Lonnegan’s hand would be even better; four 9’s. He’d make sure he beat him in the end – nobody showed up Doyle Lonnegan.
Play resumed and the cards were dealt. Quickly, all but Gondorff and Lonnegan were cut from the game with bad hands, leaving the con artist and the crime boss to face each other; mano-a-mano. Each bet heavily, confident in what he had, and the last move was Newman’s call.
“Four nine’s” said Lonnegan smugly as he unfolded his hand, laying the cards out for all to see. He relaxed and waited, a hint of a smile stealing across his face. He knew Gondorff was beaten – all he had to do was wait for him to fold and admit defeat. Everyone looked anxiously at Newman, and the camera panned to his losing hand with the four 3’s in it, held close to his vest to protect it from prying eyes. Once more he looked at the cards; once more he looked at the pile of chips. Finally, after what seemed an eternity, he leaned forward and spread his hand for all to see, looking straight at Lonnegan as he spoke in a clear, crisp voice:
“Four jacks! You owe me fifteen grand, pal,” said Gondorff, with a finality that left no doubt as to who had out-cheated whom.
Jacob Little wasn’t in the movies, but he was destined to experience the same kind of dramatic encounter with his adversaries as Gondorff had; only Little’s was nearly a century earlier.
Born in Newburyport, Massachusetts, he arrived in New York in 1817 and went to work for Jacob Barker, a prominent and successful local merchant. Standing out among his peers as a diligent and tireless worker, after a few short years Little felt confident enough to handle his own affairs, and so in 1822 he opened an office in the financial district with an eye to making his fortune. A self-styled expert in financial matters, he earned a well-deserved reputation for success on the Street and, aided by an uncanny ability to make the right decision at nearly always the right time, he grew rich in the process.
Famous for his bold, speculative moves, he invited an odd mixture of both admiration and jealousy among his peers, yet like all successful men he was not short of enemies eager to see him fall. In 1855, a select few of them thought they saw their chance.
In those early days on Wall Street options contracts could be sold with a maturity of from six to twelve months from the date of sale. Figuring that the high price of railroad stocks were due for a correction, Little saw an opportunity to profit handsomely by shorting Erie stock, so he began selling options contracts on it by the bundle. If, as had happened so many times before, he was right and Erie was indeed headed south, he only need buy when the price dropped enough to fulfill his contracts and make a huge profit. But there would have to be stock available to purchase when the time came to deliver, and that’s precisely where his adversaries saw their chance to upend him.
A few members of the Erie board had gotten together in secret and formed a syndicate of sorts. Acting in concert, they set about to buy as much Erie stock and as many of Little’s options contracts as they could lay their hands on in an attempt to run up the price and corner the market. Armed with abundant capital at their backs, it wasn’t long before they succeeded, and by the appointed date set for Little to make good on his contracts they had locked up fairly all of the available Erie stock under their control. To make matters worse, the Board had successfully bid up the price of Erie to a full 15 points above the price where Little had sold it. Disaster and ruin lay dead ahead for the great financier, and there appeared to be no way of avoiding it.
As was their right, sometime after six months had passed the Syndicate gave the required one day’s notice for delivery of the stock certificates. Little, seemingly oblivious to what was going on, calmly went about his normal routine, selling ever more options on Erie to the delight of the board members waiting to pounce.
On the appointed day the Erie office, located in lower Manhatten, was filled to overflowing with anxious brokers awaiting a showdown. There was excitement in the air, as traders and passers-by shared equally in the uneasiness of the moment. Everyone waited to see if Little would lose the day with only his “four three’s”, or if by some miracle he was able to trump the Syndicate and pull “jacks” from his hand at the last moment.
Full of confidence, the Syndicate men waited for him to appear. Finally, near to closing time he strolled in and sat down in a comfortable chair, not sensing the executioner’s axe at the ready. The board members immediately confronted him and demanded their stock, stock which they knew full well he could not deliver; or so they thought. Little eyed them for a moment, and then quickly got up and walked briskly over to Mr. Otis in the Erie transfer room across the way, where stock ownership was transferred, demanding to see the record book. Seizing it, he began writing out shares of Erie stock and doling them out to those clamoring for payment; 500 shares here, 1,000 shares there, until all comers had been satisfied. The corner had been broken! Dumbfounded, the Syndicate demanded to know how it was that he was able to deliver Erie shares when there wasn’t a shred of it available anywhere.
Little smiled with satisfaction. Patiently, he revealed that while on a trip to London a short time before he had come across an opportunity to buy a sizeable block of Erie convertible bonds, bonds which were convertible to stock upon demand within one year of purchase. Immediately recognizing their value, he quietly salted them away for future use. An hour before his meeting with the Board members, he had simply walked into the Erie office, presented the bonds, and demanded their equivalent value in stock. The Company had no choice but to comply, and Little, flush with victory, cemented his reputation as the Great Bear of Wall Street.
